Meteoric Resources (ASX:MEI) has signed a tenement sale agreement with WIN Metals (ASX:WIN) regarding the Palm Springs Gold Project in Western Australia.
Palm Springs comprises five exploration licences, three prospecting licences, and two licence applications, covering more than 12,500 hectares in the Kimberley region.
Under the agreement, WIN Metals has paid a $50,000 deposit to Meteoric. The company will also pay $950,000 cash upon settlement, as well as $1.75 million worth of WIN shares.
Meteoric Resources, which has a market capitalisation of $235.21 million, says the agreement is subject to several conditions, including WIN Metals completing a minimum $3 million capital raising within 75 days of signing the agreement.
Post-settlement, WIN is to make two cash payments, comprising $1 million and $1.25 million, 18 months after the settlement and upon producing 20,000 ounces of gold from Palm Springs.
Executive Chairman Andrew Tunks says the company believes WIN Metals will drive the Palm Springs Project forward.
“It will realise value from what has become a non-core asset and enable the full focus of Meteoric on the Caldeira Ionic Absorption Clay Rare Earth Element Project in Brazil,” Tunks says.
“The transaction structure will see us receive a combination of cash and WIN Metals shares, which will enable us to maintain some exposure to future upside from Palm Springs.”
Tunks notes that the additional cash funding will also strengthen the company’s balance sheet and support activities at Caldeira.
WIN-win sale agreement
WIN Metals has also announced that they will now refer to the acquired tenements as the Butchers Creek Gold Project, which they say reflects its primary gold endowment, and the historic Butchers Creek Gold Mine.
WIN Metals CEO Steve Norregaard says this acquisition heralds the end of a challenging period for the company searching for a new strategic direction.
“We believe we have made a great choice in securing a quality gold asset with ample growth upside and a proven production history in what we regard as a very much forgotten gold province,” Norregaard says.
“Our existing nickel and lithium resource base remains firmly part of the portfolio to complement this new commodity and new project area. The sleeves are rolled up and we are raring to get going.”
Meteoric Resources is a Perth-based rare earths-focused explorer and believes its Caldeira Project has the potential to significantly contribute to the electrification story. The Caldeira Project is considered a tier one asset that lies in the Minas Gerais State of Brazil.
Also based in Perth, WIN Metals on Tuesday (27 August) sold its nickel, lithium and other associated metal rights within the Munda Gold Project in Western Australia to Auric Mining. The company is also developing its Mt Edwards Nickel Project, and holds the Faraday-Trainline Lithium Project.
Write to Aaliyah Rogan at Mining.com.au
Images: WIN Metals
